IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

A Double-Track Auction for Substitutes and Complements

Listed author(s):
  • Ning Sun

    ()

    (School of Economics, Shanghai University of Finance and Economics)

  • Zaifu Yang

    ()

    (Faculty of Business Administration, Yokohama National University)

Registered author(s):

    We propose a new t^atonnement process called a double-track auction for efficiently allocating multiple heterogeneous indivisible items in two distinct sets S1 and S2 to many buyers who view items in the same set as substitutes but items across the two sets as complements. The auctioneer initially announces sufficiently low prices for items in one set, say S1, but sufficiently high prices for items in the other set S2. In each round, the buyers respond by reporting their demands at the current prices and the auctioneer adjusts prices upwards for items in S1 but downwards for items in S2 based on buyers' reported demands until the market is clear. Unlike any existing auction, this auction is a blend of a multi-item ascending auction and a multi-item descending auction. We prove that the auction finds an efficient allocation and its market-clearing prices in finitely many rounds. Based on the auction we also establish a dynamic, efficient and strategy-proof mechanism.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP656.pdf
    Download Restriction: no

    Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 656.

    as
    in new window

    Length: 34pages
    Date of creation: Jul 2008
    Handle: RePEc:kyo:wpaper:656
    Contact details of provider: Postal:
    Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501

    Phone: +81-75-753-7102
    Fax: +81-75-753-7193
    Web page: http://www.kier.kyoto-u.ac.jp/eng/index.html
    Email:


    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. van der Laan, G. & Talman, A.J.J. & Yang, Z.F., 1996. "Existence of an Equilibrium in a Competitive Economy with Indivisibilities and Money," Discussion Paper 1996-35, Tilburg University, Center for Economic Research.
    2. Milgrom, Paul, 1998. "Putting auction theory to work : the simultaneous ascending auction," Policy Research Working Paper Series 1986, The World Bank.
    3. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    4. Lawrence M. Ausubel & Paul Milgrom, 2002. "Ascending Auctions with Package Bidding," Working Papers 02004, Stanford University, Department of Economics.
    5. Kelso, Alexander S, Jr & Crawford, Vincent P, 1982. "Job Matching, Coalition Formation, and Gross Substitutes," Econometrica, Econometric Society, vol. 50(6), pages 1483-1504, November.
    6. Motty Perry & Philip J. Reny, 2002. "An Efficient Auction," Econometrica, Econometric Society, vol. 70(3), pages 1199-1212, May.
    7. Gul, Faruk & Stacchetti, Ennio, 1999. "Walrasian Equilibrium with Gross Substitutes," Journal of Economic Theory, Elsevier, vol. 87(1), pages 95-124, July.
    8. Paul Milgrom, 2003. "Matching with Contracts," Working Papers 03003, Stanford University, Department of Economics.
    9. Herbert E. Scarf, 1984. "Neighborhood Systems for Production Sets with Indivisibilities," Cowles Foundation Discussion Papers 728, Cowles Foundation for Research in Economics, Yale University.
    10. Hurwicz, Leonid, 1973. "The Design of Mechanisms for Resource Allocation," American Economic Review, American Economic Association, vol. 63(2), pages 1-30, May.
    11. Crawford, Vincent P & Knoer, Elsie Marie, 1981. "Job Matching with Heterogeneous Firms and Workers," Econometrica, Econometric Society, vol. 49(2), pages 437-450, March.
    12. Gabrielle Demange & Gale David & Marilda Sotomayor, 1986. "Multi-Item Auctions," Post-Print halshs-00670982, HAL.
    13. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation for Research in Economics, Yale University.
    14. Bevia, Carmen & Quinzii, Martine & Silva, Jose A., 1999. "Buying several indivisible goods," Mathematical Social Sciences, Elsevier, vol. 37(1), pages 1-23, January.
    15. Shapley, Lloyd & Scarf, Herbert, 1974. "On cores and indivisibility," Journal of Mathematical Economics, Elsevier, vol. 1(1), pages 23-37, March.
    16. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541 Elsevier.
    17. Ning Sun & Zaifu Yang, 2006. "Equilibria and Indivisibilities: Gross Substitutes and Complements," Econometrica, Econometric Society, vol. 74(5), pages 1385-1402, 09.
    18. Paul Klemperer, 2004. "Auctions: Theory and Practice," Online economics textbooks, SUNY-Oswego, Department of Economics, number auction1.
    19. S.J. Rassenti & V.L. Smith & R.L. Bulfin, 1982. "A Combinatorial Auction Mechanism for Airport Time Slot Allocation," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 402-417, Autumn.
    20. Gul, Faruk & Stacchetti, Ennio, 2000. "The English Auction with Differentiated Commodities," Journal of Economic Theory, Elsevier, vol. 92(1), pages 66-95, May.
    21. Bikhchandani, Sushil & Mamer, John W., 1997. "Competitive Equilibrium in an Exchange Economy with Indivisibilities," Journal of Economic Theory, Elsevier, vol. 74(2), pages 385-413, June.
    22. Krishna, Vijay & Maenner, Eliot, 2001. "Convex Potentials with an Application to Mechanism Design," Econometrica, Econometric Society, vol. 69(4), pages 1113-1119, July.
    23. Cremer, Jacques & McLean, Richard P, 1985. "Optimal Selling Strategies under Uncertainty for a Discriminating Monopolist When Demands Are Interdependent," Econometrica, Econometric Society, vol. 53(2), pages 345-361, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:kyo:wpaper:656. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ryo Okui)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.